Transport allowance exempt up to Rs 1,600

SC VASUDEVA

Transport allowance exempt up to Rs 1,600 pm

Q. My son is a government pensioner. He has joined a private firm. He has to travel 60-70 km and incur an expenditure of Rs 100 daily on travelling. Kindly advise as to how much additional income he should show for computing the total income for tax purposes. Is there any rebate for this expense?

— Sant Singh

A. I presume that your son has joined a private firm as a professional and is getting professional fee for providing consultancy. In such a case, the amount incurred for conveyance to and from his destination shall be deductible from the professional fee charged from the entity to which consultancy is being provided by him. Therefore, he should quote his professional fee taking into consideration the amount which he has to incur for going to and coming back from the office of such entity. In case your son has joined the entity as an employee, he should negotiate for being given a transport allowance which is exempt from tax to the extent of Rs 1,600 per month.

Q. Your kind attention is drawn towards your reply furnished in The Tribune dated 28.12.2015 and an article in The Tribune dt. 16.5.2016 under the title “All you should know about form 15G, 15H.”

The query relates to a person Mr A (age 42 years) whose income from bank interest is Rs 2,60,000 but after considering other income and deductions under Section 80C, the net income is below taxable limit, say Rs 2,40,000. According to your advice (28.12.15), Mr A is well within his rights to file form 15G, and avoid TDS. However, as per article dated 16.5.16, the assessee cannot file form 15G because he does not satisfy the condition that the total of the aggregate of income for which form 15G can be submitted should not exceed the basic exemption limit of Rs 2.50 lakh. I shall be grateful if the matter is reconsidered in totality and final view given.

— BK Bindal

A. Form 15G can be filed only by an individual if tax on his estimated total income of the previous year in which interest income is to be included in computing his total income will be nil. In reply to your query published on December 28, 2015 in the column of The Tribune, it was clearly stated that your daughter can file Form 15G in view of the fact that tax payable on her estimated income would be nil. Therefore, there is no contradiction in what has been pointed out in the article written by Mr Balwant Jain and the reply which has been given to your query which was published on December 28, 2015. In the query now given, Mr A would be able to file form 15G only if tax on his estimated total income of the previous year in which the interest income is to be included in computing his total income will be nil.

Q. The details of my and my friend’s income are as follows: Please advise.

a) Gurcharan Singh, age 74 years

(i) Income 2015-16: Pension Rs 3,66,000

(ii) I have no other income

(iii) Deduction of Rs 1,25,000 u/s 80 DD on account of my mentally retarded (MR) daughter’s 100% disability

b) My friend, age 55 years

(i) Income 2015-16: Pension Rs 1,85,000

(ii) Income from rent: Rs 60,000

Please advise whether I-T returns for AY 2016-17 are required to be filed or not.

— Gurcharan Singh

A. Your queries are replied hereunder:

a) In case of Gurcharan Singh, there would be no tax liability provided he has incurred expenditure for the medical treatment (including nursing, training and rehabilitation) of a dependant being a person with a disability. The above deduction is also required to be supported by a certificate issued by the medical authority in the prescribed form (Form 10IA) and as per Section 80DD of the Income-tax Act, 1961 (The Act) is required to be enclosed to the return. However, as the returns are now being filed online no enclosures are allowed to be attached to the return. In view thereof, such certificate should be kept on record so that the same can be produced as and when this issue is enquired into by tax authority. It may be added that he will have to file tax return in view of the provisions of Section 139 of the Act even though his total income would be below the taxable income.

b) There will be no tax liability in case of your friend as his total income works out at Rs 2,25,000 without deducting the house tax paid from the annual rental. In case the amount of house tax paid is deducted from the total amount of rent, the total income may not exceed Rs 2,50,000, being the maximum amount on which tax is not chargeable for assessment year 2016-17.